This paper claims that the intuitive and widespread legitimating power of majority rule (MR) arises from the link between majority rule and the principle of equality of political opportunity. The egalitarian character of MR is established by exploring “puzzles” in democratic theory, such as the insensitivity of democratic voting procedures to unequal intensity of citizens' preferences, and the relationship between the principle of unanimity (sometimes thought better to respect citizens' equality) and MR. Special attention is directed to the relationship between (...) political equality and equality in the outcomes of political decisions: The claim is made that the language of equal political opportunity captures well the idea of equal political influence, in the circumstance of disagreement about what is required to achieve equal treatment through the outcomes of political decisions. (shrink)

During the last half of the twentieth century, legal philosophy (or legal theory or jurisprudence) has grown significantly. It is no longer the domain of a few isolated scholars in law and philosophy. Hundreds of scholars from diverse fields attend international meetings on the subject. In some universities, large lecture courses of five hundred students or more study it. The primary aim of the Law and Philosophy Library is to present some of the best original work on legal philosophy from (...) both the Anglo-American and European traditions. Not only does it help make some of the best work avail able to an international audience, but it also encourages increased awareness of, and interaction between, the two major traditions. The primary focus is on full-length scholarly monographs, although some edited volumes of original papers are also included. The Library editors are assisted by an Editorial Advisory Board of internationally renowed scholars. Legal philosophy should not be considered a narrowly circumscribed field. (shrink)

Contractarianism initially made its mark, in the seventeenth century, as a sort of theory of everything in ethics. But gradually philosophers became convinced that there were resources available outside contractarianism for settling important moral questions—for instance, ideas of human rights and the moral equality of persons. Then Rawls revived contractarianism with a more modest aim—namely, as a theory of justice. But even this agenda for contractarianism has been called into question, most notably by G.A. Cohen, who contends that we have (...) other tools at our disposal for identifying the true conception of justice. So the question remains: how should contractarianism be construed if it is to provide answers to questions that cannot be answered in some other way? In my essay I offer a very simple answer: contractarianism should be construed as a political morality. I arrive at this answer by starting with contractarianism as a theory of everything and paring away the unappealing layers of contractarianism so understood. I begin by describing what contractarianism is. Then I dispense with contractarianism as a theory of state legitimacy, as a theory of interpersonal morality, and as a theory of justice. Finally, I distinguish political morality from the other already-mentioned areas of morality, and argue that contractarianism is a sensible theory of its grounds. (shrink)

Abuse of authority is an unsolved problem in the new institutional theory of the firm. This paper attempts a double attack to this problem by developing a contractarian view of corporate codes of ethics. From the ex-ante standpoint the paper elaborates on the idea of a Social Contract based on Co-operative Bargaining Games and deduces from it the fair/efficient 'Constitution' of the firm endorsed by means of a well-devised corporate code of ethics. From the ex-post standpoint, codes of ethics are (...) proved to be self-enforcing norms, by showing how they put at work the mechanism of a Repeated Game of Reputation within hierarchical transactions (firms) characterised by incomplete contracts and unforeseen events. To accomplish this task a theory of rationality in the face of unforeseen contingencies is sketched by working out the idea that the domain of a principle of ethics defines a fuzzy event, i.e. an event to which also the ex-ante unforeseen, unimaginable states of the world belong to a certain degree. (shrink)

This essay seeks to give a contractarian foundation to the concept of Corporate Social Responsibility (CSR), meant as an extended model of corporate governance of the firm. It focuses on justification according to the contractarian point of view (leaving compliance and implementation problems to a related article, [Sacconi 2004b, forthcoming in the Journal of Business Ethics]). It begins by providing a definition of CSR as an extended model of corporate governance, based on the fiduciary duties owed to all the firm’s (...) stakeholders. Then, by establishing the basic context of incompleteness of contracts and abuse of authority, it analyses how the extended view of corporate governance arises directly from criticism of the contemporary neo-institutional economic theory of the firm. Thereafter, an application of the theory of bargaining games is used to deduce the structure of a multi-stakeholder firm, on the basis of the idea of a constitutional contract, which satisfies basic requirements of impartial justification and accordance with intuitions of social justice. This is a sequential model of constitutional bargaining, whereby a constitution is first chosen, and then a post-constitutional coalition game is played. On the basis of the unique solution given to each step in the bargaining model, the quest for a prescriptive theory of governance and strategic management is accomplished, so that I am able to define an objective-function for the firm consistent with the idea of CSR. Finally, a contractarian potential explanation for the emergence of the multi-fiduciary firm is provided. (shrink)

Schools of economic ethics inspired by Buchanan propose viewing ethical conflicts as prisoners’ dilemmas to facilitate solutions based on Pareto-improving institutional changes. Given that healthcare is determined by complex institutional arrangements, it has been claimed that this approach is also suitable for business ethics in healthcare. To scrutinize this claim, this research systematically searched for studies reporting PD structures in healthcare. PubMed, EconLit, and EconBiz were searched to find articles in German and English. Study type, characteristics of the game, and (...) the proposed means to overcome the dilemma were extracted and analyzed for aspects supporting or challenging the claim. Across 53 studies, 68 descriptions of various dilemmas in healthcare and public health were identified. Many authors successfully developed proposals for institutional change to overcome these dilemmas. However, many of these analyses exhibited limitations such as oversimplifications or inconsistencies. Also, the quality of evidence on both the characteristics of dilemmas and the effectiveness of proposed solutions was very poor. The subsamples of studies that explicitly cited the ethical approach were disjunct from those that applied empirical methods to analyze the dilemmas. The large number of identified PDs indicates that economic ethics is relevant to healthcare. However, there is a need for further evidence to substantiate both the descriptive and prescriptive claims of this ethical theory. It should thus be seen as a complement that needs justification, rather than a substitute superior to other ethical frameworks. (shrink)

The widely recognized impasse in legal theory, which requires an account of law as “both a social fact and a framework of reasons for action” has been most interestingly addressed in recent years by writers characterizing law as convention in the sense of a solution to a game theoretical “coordination problem.” As critics have neutralized most of these proposals, the author advances an account of conventionalism, drawing on economic and sociological theory, which he claims makes the bridge between positivist and (...) naturalist theories of law without compromising the basic insights of either. The result is a unified theory of law, politics and society. (shrink)

The gap between economic rationality, as embedded in utility maximization, and ethical rationality, identified with a set of rules that prescribe the right course of action, has been a challenging issue for economists, philosophers, and business ethicists. Despite the difference and the noncompetition between a scientific economic approach of economics and business ethics, and a behavioral and philosophical one, we highlight the importance of the Aristotelian concept of prudence or phronesis applied to business activity. Phronesis allows for a conceptualization of (...) rationality that can be simultaneously applied to economics and ethics. It also allows conceiving the intrinsically ethical nature of economic rationality. This relationship requires an appropriate education and the intervention of the state. (shrink)

Joseph Schumpeter's work has been all too selectively appropriated by public choice theorists. Schumpeter criticized the high level of rationality the classical model of democracy imputes to citizens, and he provided an alternative theory, inspiring rational choice theory and allowing for diverse forms of irrationality. Following in Schumpeter's footsteps I will discuss four problems: the deficient rationality of voters, politicians as ?political entrepreneurs,? leadership in democracy and the rise of the ?political class,? and the affinity between democracy and capitalism.

This article offers an overview over the wide scope business ethics has reached in German speaking countries; works which in their majority are not yet available in English translation. The proposed concepts range from a focus on the individual manager and a focus on moral education of managers, via the procedural model of discourse ethics to pressure group ethics and business ethics from a Christian point of view. Other authors suggest an economic theory of moral behaviour, or see ethics as (...) an assurance for decisions under uncertainty or argue for a more enlightened concept of economic rationality. (shrink)

The view of Mandeville as a pioneer of laissez-faire is difficult to reconcile with his repeated insistence that private vices were turned into public benefits by the 'dexterous management of the skilful politician'. Even if references to the skilful politician are regarded as shorthand for a legal and institutional framework, there remains the question of whether such a framework is a spontaneous order or the product of purposeful experiment as Mandeville thought? Mandeville warned about the harmful effects of meddling but (...) his complaint was about the actions of fashionable do-gooders rather than government. He understood that the voluntariness of a transaction could be regarded as a defence against complaints of unfairness but he was quick to point out the limitations of voluntariness especially in the market for labour. Mandeville's objective was to teach people what they are not what they should be. He pointed to the strengths of the emerging market system but was not afraid to expose its faults. (shrink)

RESUMO Neste artigo, são rejeitadas duas teses relativamente aceitas a respeito do projeto filosófico tardio desenvolvido por John Rawls. A primeira tese afirma que o objetivo de obras como "O Liberalismo Político" e "Justiça como Equidade: Uma Reformulação" seria o de revisar a natureza do argumento contratualista de Rawls. A segunda, por sua vez, afirma que a principal consequência dessa revisão teria sido certo recuo das implicações igualitárias de sua teoria da justiça original. Procurar-se-á rejeitar ambas as proposições mostrando que (...) "O Liberalismo Político" deve ser entendido como uma teoria acerca do uso legítimo do poder em uma sociedade democrática, e que essa teoria da legitimidade possui consequências distributivas próprias, incompatíveis com teorias liberais convencionais. ABSTRACT The article aims to reject two interrelated theses on the philosophical project carried forward by the late John Rawls. The first thesis states that there is an important change in Rawls' late works such as "Political Liberalism" and "Justice as Fairness: A Restatement" regarding the nature of his theory. Particularly, this change would had brought about a reassessment of Rawls' contractualist argument. The second thesis claims that one of the most important consequences of such reassessment is the retreat from strong egalitarian commitments, as they were present in Rawls' original theory of justice. The article rejects both theses, showing that Political Liberalism can be understood as a theory about the legitimate uses of power in a democratic society and that such new theory of legitimacy brings about distributive consequences by its own that sharply contrast with classical liberal theories. (shrink)

There is a perennial ambiguity in the rule-of-law preposition: it predicates that the law shall rule, but which law? This legal loophole has led to a diverse array of interpretations of the concept. Of these, two appear particularly adverse to what the rule of law should primarily be—the rulership of the law—yet still remain dominant. On the one hand, the rule of law is intended to be the vehicle to deliver above-the-law goods such as human rights or other individual entitlements (...) like property, and to forever shield them against any other force, including the law. On the other hand, the rule of law is believed to be a tool at the rulers’ disposal, who make use of the law but are not bound by it, for either legal or practical reasons. In both cases, a pre-legal setting for society allocates rulership to something but not the law, against the very essence of the ideal: an authoritative legal practice for the sake of regulating the present society. As such, the rule of law has to meet certain requirements of craftsmanship, like conditions in law-making and law-enforcement, and sources, which are to be democratically underpinned. (shrink)

Developing and applying a framework for understanding the complexities of economic and legal considerations in two recent Supreme Court rulings was the focus of this research. Of especial concern was the protection of intellectual property in the pharmaceutical industry. Two cases from 2013 were selected: FTC v. Activis and Association for Molecular Pathology v. Myriad Genetics, Inc.. Part of the rationale for the selection was the importance of the Supreme Court rulings and the importance of the pharmaceutical sector. A qualitative (...) content analysis of the Court’s reported decision in each case was analyzed. Since ethical considerations may or may not be consistent with efficiency considerations of plaintiffs, defendants, or the courts, both efficiency and ethical arguments were included. Equally important to the understanding of the economic and ethical issues in the two above- mentioned cases was the development of a rationale for including and excluding a variety of ethical theories, ultimately influenced by Markkula Center For Applied Ethics Of Santa Clara University and Schumann :93–111, 2001). The refinement and use of a levels analysis approach portrays societal, organizational, and individual impacts, and allows for deeper understanding of litigated cases, irrespective of the country in which the litigation takes place :385–393, 2004; Foss et al., J Manag Stud 47:455–482, 2010). A rationale for this framework is the societal and organizational impacts on the myriad of stakeholders in the pharmaceutical sector. We suggest that this framework can be applied to other industries and other complex conflicts among stakeholders as well. (shrink)

Self-Interest and Public Interest in Western Politics showed that the public, politicians, and bureaucrats are often public spirited. But this does not invalidate public-choice theory. Public-choice theory is an ideal type, not a claim that self-interest explains all political behavior. Instead, public-choice theory is useful in creating rules and institutions that guard against the worst case, which would be universal self-interestedness in politics. In contrast, the public-interest hypothesis is neither a comprehensive explanation of political behavior nor a sound basis for (...) institutional design. (shrink)

ABSTRACT Self-Interest and Public Interest in Western Politics showed that the public, politicians, and bureaucrats are often public spirited. But this does not invalidate public-choice theory. Public-choice theory is an ideal type, not a claim that self-interest explains all political behavior. Instead, public-choice theory is useful in creating rules and institutions that guard against the worst case, which would be universal self-interestedness in politics. In contrast, the public-interest hypothesis is neither a comprehensive explanation of political behavior nor a sound basis (...) for institutional design. (shrink)

Conventionalism as a distinct approach to the social contract received significant attention in the game-theoretic literature on social contract theory. Peter Vanderschraaf’s sophisticated and innovative theory of conventional justice represents the most recent contribution to this tradition and, in many ways, can be viewed as a culmination of this tradition. In this article, I focus primarily on Vanderschraaf’s defense of the egalitarian bargaining solution as a principle of justice. I argue that one particular formal feature of this bargaining solution, the (...) baseline consistency requirement, may stand in tension with other features of conventionalism as an approach to the social contract and limit the scope of Vanderschraaf’s theory to societies in which de facto an egalitarian sense of justice evolves. It limits the scope of Vanderschraaf’s theory in the face of moral diversity. A similar limitation applies to Vanderschraaf’s theory of democratic political authority. Despite these minor limitations, Vanderschraaf’s theory can only be seen as a major success and significant contribution to social contract theory. (shrink)

The topic of moral diversity is not only prevalent in contemporary moral and political philosophy, it is also practically relevant. Moral diversity, however, poses a significant challenge for moral theory building. John Thrasher, in his discussion of public reason theory, which includes social contract theory, argues that if one seriously considers the goal of moral constructivism and considerations of representation and stability, then moral diversity poses an insurmountable problem for most public reason theories. I agree with Thrasher that moral diversity (...) poses a significant challenge for orthodox multistage social contract theories. In fact, I even add a further problem for such theories under the assumption of deep moral diversity. Nevertheless, I argue that my recently developed multilevel social contract theory overcomes these problems. I focus on some of the underexplored features of this theory to show that multilevel social contract theory offers one conceptually coherent and plausible way to render social contract theory viable and relevant for modern diverse societies. (shrink)

In this article, I derive a weak version of Kant's categorical imperative within an informal game-theoretic framework. More specifically, I argue that Hobbesian agents would choose what I call the weak principle of universalization, if they had to decide on a rule of conflict resolution in an idealized but empirically defensible hypothetical decision situation. The discussion clarifies (i) the rationality requirements imposed on agents, (ii) the empirical conditions assumed to warrant the conclusion, and (iii) the political institutions that are necessary (...) to implement the derived principle. The analysis demonstrates the moral significance of the weak principle of universalization and its epistemic advantage over the categorical imperative. (shrink)

Harsanyi defends utilitarianism by means of an axiomatic proof and by what he calls the 'equiprobability model'. Both justifications of utilitarianism aim to show that utilitarian ethics can be derived from Bayesian rationality and some weak moral constraints on the reasoning of rational agents. I argue that, from the perspective of Bayesian agents, one of these constraints, the impersonality constraint, is not weak at all if its meaning is made precise, and that generally, it even contradicts individual rational agency. Without (...) the impersonality constraint, Harsanyi's two justifications of utilitarianism on the grounds of Bayesian rationality fail. As an alternative, I develop a contractarian framework that is compatible with individual rational agency and Harsanyi's central assumptions, and that allows the derivation of moral conclusions on the grounds of Bayesian rationality. The developed framework offers a novel justification of contractarian ethics and may best be described as a combined version of Harsanyi's equiprobability model and Rawls's original position. (shrink)

Why do we have social norms—of fairness, cooperation, trust, property, or gender? Modern-day Humeans, as I call them, believe these norms are best accounted for in cultural evolutionary terms, as adaptive solutions to recurrent problems of social interaction. In this paper, I discuss a challenge to this “Humean Program.” Social norms involve widespread behaviors, but also distinctive psychological attitudes and dispositions. According to the challenge, Humean accounts of norms leave their psychological side unexplained. They explain, say, why we share equally, (...) but not why we disapprove of those who don’t. I defend the Humean Program against this challenge. In particular, I suggest an idea for how to extend the Program to account for the psychological side of norms. Socially adaptive behaviors aren’t just likely to emerge in a group; They are also likely to be widely taught within it. The transmission of these behaviors through instruction explains why they are associated with distinctive normative attitudes and dispositions. These attitudes play a pedagogical role in helping transmit these behaviors to children and newcomers. (shrink)

Contract-based approaches have been a focus of attention in business ethics. As one of the grand traditions in political philosophy, contractarianism is founded on the notion that we will never resolve deep moral disagreement. Classical philosophers like Hobbes and Locke, or recent ones like Rawls and Gaus, seek to solve ethical conflicts on the level of social rules and procedures. Recent authors in business ethics have sought to utilize contract-based approaches for their field and to apply it to concrete business (...) dilemmas. However, the application of contractarianism to management contexts can cause difficulties. Our article discusses this conceptual problem of contractarian business ethics and presents the idea of order ethics as an alternative. Order ethics, as we argue, can make a difference by conceptually bridging the gap between contractarianism and business ethics. (shrink)

This article discusses the possibility of an economic foundation for a work and savings ethic. In particular, James M. Buchanan has, in his late works, endorsed traditional 'Puritan' demands for working and saving more, while arguing that this is beneficial for all members of a society. I will question Buchanan's analysis of the 'Puritan' ethic both in normative and methodological respects before aiming at a constructive interpretation.

Many traditional conceptions of ethics use categories and arguments that have been developed under conditions of pre-modern societies and are not useful in the age of globalisation anymore. I argue that we need an economic ethics which employs economics as a key theoretical resource and which focuses on institutions for implementing moral norms. This conception is then elaborated further in the area of business ethics. It is illustrated in the case for banning child labour.

El artículo sostiene que la teoría liberal está tensionada por una pretensión de universalidad normativa y su implementación institucional en el contexto de los Estados nacionales. Esta tensión se expresa claramente en el caso de la inmigración con la demanda estatal de control discrecional de las fronteras. El artículo desarrolla cuatro argumentos a favor de la relevancia normativa de las fronteras, y sostiene que no son conclusivos. Correspondientemente, desde una perspectiva liberal se dispondría de menos argumentos para justificar el cierre (...) discrecional de las fronteras. (shrink)

The Chances of Explanation: Causal Explanation in the Social, Medical, and Physical Sciences Paul Humphreys, 1989 Princeton University Press x+170 pp., £12.95 (paperback) ISBN 0 691 020286 8; £25.00 (hardback) ISBN 0 69107353 8In Search of a Better World: Lectures and Essays from Thirty Years Karl Popper London, Routledge £25.00 (hardback)Artificial Morality: Virtuous Robots for Virtual Games Peter Danielson, 1992 London, Routledge £35.00 (hardback) ISBN 0 415 034841; £10.99 (paperback) ISBN 0 415 07691 9A System of Pragmatic Idealism Nicholas Rescher, (...) 1992 Princeton, Princeton University Press 335pp., $37.50 (hardback). (shrink)

Part one of this paper considers the question of property rights in general and asks how such rights can be justified, contrasting Consequentialist with other approaches and concludes that it is impossible to avoid a broadly Consequentialist approach. Part two considers the question of intellectual property (IP) and asks how property rights justifications apply to it. The basic economics if IP is indispensable in this discussion. Finally, part three, considers IP in the light of modern technological developments. I conclude that (...) the real dangers lie more in the specific ways government and special interests respond to this technology than from the nature of IP rights themselves. (shrink)

This paper draws a connection between recentdevelopments in naturalized philosophyof science and the Buchanan research programin economics. Economic approaches innaturalized philosophy of science canbe combined to form an economic philosophy ofscience. After giving an overview of someof these approaches, I lay out the fundamentalsof the Buchanan research program. I arguethat its main elements are a theory of interactionsand a normative foundation in consensus whichhelp to answer some important criticismsof economic philosophy of science.

In his posthumous work Power and Prosperity , the economist Mancur Olson asked why the economies of many of those countries of the former Soviet Union and other emergent countries that had at last adapted to the theoretical and practical presuppositions of the market economy had not seen themselves, notwithstanding, recompensed with the prosperity that this economic model promises to all those who follow its rules. The core of the answer was in a long paragraph that is perhaps elemental to (...) a jurist but may be original and worth remembering as an innovative thesis in the world of economists. (shrink)

That the maximization of quality-adjusted life years violates concerns for fairness is well known. One approach to face this issue is to elicit fairness preferences of the public empirically and to incorporate the corresponding equity weights into cost-utility analysis (CUA). It is thereby sought to encounter the objections by means of an axiological modification while leaving the value-maximizing framework of CUA intact. Based on the work of Lübbe (2005, 2009a, 2009b, 2010, forthcoming), this paper questions this strategy and scrutinizes the (...) concomitant assumptions concerning the nature of prioritization decisions. Empirical studies indicate that these premises are in fact unwarranted. People chose a certain resource allocation because they perceive it as a fair way to treat the persons concerned, not because it maximizes something valuable, and it is questionable if prioritization decision can be represented as value-maximizing choices at all. This reflection on the fundamental distinction between deontological and consequentialist reasoning bears general implications for the scope of ‘economic imperialism.’. (shrink)

John Stuart Mill provides a classic defense of individual and group rights to liberty with respect to purely private or self-regarding matters: The only part of the conduct of any one, for which he is amenable to society, is that which concerns others. In the part which merely concerns himself … directly, and in the first instance, … his independence is, of right, absolute.… From this liberty of each individual, follows the liberty, within the same limits, of combination among individuals; (...) freedom to unite, for any purpose not involving harm to others: the persons combining being supposed to be of full age, and not forced or deceived. (shrink)

There has been a persistent tendency to identify what is called “the freerider problem” in the production of collective goods with the prisoner's dilemma. However, in this article I want to challenge that identification by presenting an analysis of what are in fact a variety of collective action problems in the production of collective goods. My strategy is not to consult any intuitions about what the free-rider problem is; rather I will be looking at the problematic game-theoretic structures of various (...) situations associated with the production of different types of collective goods, thereby showing what sorts of difficulties a community concerned with their voluntary production would face. I call all of these dilemmas free-rider problems because in all of them certain individuals find it rational to take advantage of others' willingness to contribute to the good in a way that threatens its production. Some readers may feel that the term ‘free-rider problem’ is so identified with the prisoner's dilemma that my extension of the term in this way “jars”; if so, I invite them to coin another word for the larger phenomenon. My aim is not to engage in linguistic analysis but to attempt at least a partial analysis of the complicated structure of collective good production. (shrink)

Faith in the universal moral equality of people enjoys close to unanimous consensus in present moral and political philosophy. Yet its philosophical justification remains precarious. The search for the basis of equality encounters insurmountable difficulties. Nothing short of a miracle seems required to stabilize universal equality in moral status amidst a vast space of distinctions sprawling between people. The difficulties of stabilizing equality against differentiation are not specific to any particular choice regarding the basis of equality. To show this, I (...) will provide a general diagnosis of the difficulty together with its application to the arguably best attempt at a solution, namely to ground moral equality in a form of subjectivity. In his recent book Equality for Nonegalitarians, George Sher advances the view that “we are moral equals because we are equally centers of consciousness. …The fact that we are equals in this respect—that each is a world unto himself—…explains why each person’s interests are of equal moral importance”. Yet the worlds we are unto ourselves can no more withstand the force of differentiation than previous candidates suggested in the literature, and the reasons why run deeper than even some critics have recognized. The prospects for vindicating universal moral equality remain bleak. (shrink)

As behavioural economics reveals, human decision-making deviates from neoclassical assumptions about human behaviour and people (often) fail to make the ‘right’ welfare-enhancing choice. The purpose of Sunstein and Thaler’s concept of ‘nudge’ is to improve individual welfare. To provide normative justification, they argue that the only relevant normative criterion is whether the individual is ‘better off as judged by themselves’, so that the direction in which people are to be nudged is defined by their own preferences. In light of behavioural (...) findings, however, people’s choices do not provide a sound basis for eliciting preferences and thus for assessing welfare. In this paper, I aim to challenge Sunstein and Thaler’s normative view, arguing that it is unreasonable to rely on conventional welfare economics, particularly considering the given context. Sunstein and Thaler depend on an approach of ‘preference purification’ which assumes informed, latent, and true preferences: As a result they face crucial methodological, epistemological, and practical objections, and cannot show how their approach enhances individual welfare. By building on the concepts of R. Sugden and C. Schubert, I develop an alternative normative framework for behavioural public policy, based on a contractualist perspective in which people may consent to collective choice rules in order to align future behaviour with values, to achieve particular goals or to preserve personal integrity. Individual consent and citizens’ participation and deliberation are crucial to this approach. This contractualist approach may provide a normative justification for behavioural public policy, and help to reconcile behavioural and normative economics. (shrink)

An influential strand in recent action-theory employs constitutivist arguments in order to present accounts of individual agency and practical identity. I argue for an extension of this framework into the interpersonal realm, and suggest using it to reassess issues in jurisprudence. A legal system is an instantiation of the solution to the inescapable tasks of self-constituting action and identity-formation in the presence of other agents. Law's validity and normativity can be enlightened when the constitutivist approach considers the external prerequisites of (...) individuals' self-conceptions qua agents. More specifically, this argumentative strategy allows a reassessment of Fuller's “internal morality of law.” Whereas, pace Fuller, morally substantive conclusions cannot be derived from formal criteria of legality, there are unconditional normative requirements that constrain law. (shrink)

Economic approaches to both social evaluation and decision-making are typically Paretian or utilitarian in nature and so display commitments to both welfarism and consequentialism. The contrast between the economic approach and any rights-based social philosophy has spawned a large literature that may be divided into two branches. The first is concerned with the compatibility of rights and utilitarianism seen as independent moral forces. This branch of the literature may be characterized as an example of the broader debate between the teleological (...) and deontological approaches. The second is concerned with the possibility that substantial rights may be grounded in utilitarianism with the moral force of rights being derived from more basic commitments to welfarism and consequentialism. This branch of the literature may be characterized as an exploration of the flexibility of the teleological approach, and, in particular, its ability to give rise to views more normally associated with the deontological approach. This essay is concerned with the second branch of the literature. (shrink)

This paper considers the distribution of responsibility for prevention of negative social or ecological effects of production and consumption. Responsibility is related to ability and ability depends on welfare. An increase in competition between Western companies depresses their profitability, but increases the welfare of Western consumers and,hence, their ability to acknowledge social values. Therefore, an increase in competition on consumer markets shifts the balance in responsibility from companies to consumers to prevent negative external effects from production and consumption patterns. An (...) increase in competition on investor markets will shift the balance in an opposite direction. (shrink)

Thomas Piketty’s Capital and Ideology offers a powerful critique of ideological justifications for inequality in capitalist societies. Does this mean we should reject capitalist institutions altogether? This paper defends some aspects of capitalism by explaining the epistemic function of market economies and their ability to harness capital to meet the needs of the relatively disadvantaged. We support this classical liberal position with reference to empirical research on historical trends in inequality that challenges some of Piketty’s interpretations of the data. Then (...) we discuss the implications of this position in terms of limits on the efficacy of participatory governance within firms and the capacity of the state to levy systematic taxes on wealth. (shrink)

Lorenzo Sacconi's recent re-statement of his social contract account of business ethics is a major contribution to our understanding of the normative nature of CSR as the expression of a fair multi-party agreement supported by the economic rationality of each participant. However, at one crucial point in his theory, Sacconi introduces the concept of stakeholders' conformist preferences - their disposition to punish the firm if it defects from the agreement, refusing to abide by its own explicit CSR policies and norms. (...) We take issue with him over this concept: we show that the assumption of conformist preferences is a moral premise, and it arguably weakens the normativity of the theory as a whole. As an alternative, we propose an evolutionary game theoretic approach. We draw upon recent applications of evolutionary game theory to moral philosophy , and we use a computer simulation of the trust game. According to this approach, the failure of the logic of reputation, which is the problem conformist preferences were introduced to solve, is overcome through the dynamics of interaction. (shrink)

Lorenzo Sacconi's recent re-statement of his social contract account of business ethics is a major contribution to our understanding of the normative nature of CSR as the expression of a fair multi-party agreement supported by the economic rationality of each participant. However, at one crucial point in his theory, Sacconi introduces the concept of stakeholders' conformist preferences - their disposition to punish the firm if it defects from the agreement, refusing to abide by its own explicit CSR policies and norms. (...) We take issue with him over this concept: we show that the assumption of conformist preferences is a moral premise, and it arguably weakens the normativity of the theory as a whole. As an alternative, we propose an evolutionary game theoretic approach. We draw upon recent applications of evolutionary game theory to moral philosophy (Skyrms, Danielson), and we use a computer simulation of the trust game. According to this approach, the failure of the logic of reputation, which is the problem conformist preferences were introduced to solve, is overcome through the dynamics of interaction. (shrink)

Lorenzo Sacconi's The Social Contract of the Firm (Berlin, Springer, 2000) is a major contribution to the normative theory of the firm. It contains a full-fledged contractarian explanation of the role of Corporate Codes of Ethics. Sacconi proposes a game-theoretical model of the normative structure of the firm, including explicit and implicit contracts binding the members of the organisation, and the so-called constitutional contract: the hypothetical agreement that sets the basic co-operative structure in which the organisation consists. While Sacconi's theory (...) is sound and full of suggestions, it is doubtful whether it completely grasps the nature of organisational ethics. In presenting organisations as the product of an agreement among self-interested individuals, the model does not account for the social and systemic embeddedness of business institutions. This paper points to several shortcomings of Sacconi's view, and explores alternative understandings of a contractarian morality as applied to business ethics. (shrink)

Volume 31, Issue 1, December 2020, Page 47-66.

By considering what we identify as a problem inherent in the ‘nature of the firm’—the risk of abuse of authority—we propound the conception of a social contract theory of the firm which is truly Rawlsian in its inspiration. Hence, we link the social contract theory of the firm with the general theory of justice. Through this path, we enter the debate about whether firms can be part of Rawlsian theory of justice showing that corporate governance principles enter the “basic structure.” (...) Finally, we concur with Sen’s aim to broaden the realm of social justice beyond what he calls the ‘transcendental institutional perfectionism’ of Rawls’ theory. We maintain the contractarian approach to justice but introduce Sen’s capability concept as an element of the constitutional and post-constitutional contract model of institutions with special reference to corporate governance. Accordingly, rights over primary goods and capabilities are granted by the basic institutions of society, but many capabilities have to be turned into the functionings of many stakeholders through the operation of firms understood as post-constitutional institutional domains. The constitutional contract on the distribution of primary goods and capabilities should then shape the principles of corporate governance so that at post-constitutional level anyone may achieve her/his functionings in the corporate domain by exercising such capabilities. In the absence of such a condition, post-constitutional contracts would distort the process that descends from constitutional rights and capabilities toward social outcomes. (shrink)

The aim of this paper is to critically review the game-theoretic discussion of Hobbes and to develop a game-theoretic interpretation that gives due attention both to Hobbes's distinction between “moderates” and “dominators” and to what actually initiates conflict in the state of nature, namely, the competition for vital goods. As can be shown, Hobbes's state of nature contains differently structured situations of choice, the game-theoretic representation of which requires the prisoner's dilemma and the assurance game and the so-called assurance dilemma. (...) However, the “state of war” ultimately emerges from situations that cannot be described by any of these games because they represent zero-sum games in which the outcome of mutual cooperation does not exist. (shrink)

This paper assesses James M. Buchanan's claim of following a positive approach in stark contrast to the normative approach to public finance of Richard A. Musgrave. The goal of this paper is to shed light on the foundations of modern American public finance by analysing one aspect of the methodology of its two most prominent fathers. I show (1) that it is difficult to distinguish Musgrave's and Buchanan's theories of public goods along the positive/normative dividing line and (2) that Buchanan's (...) theory can also be considered normative. In the first three parts, I follow the Weberian methodological tradition in looking for value judgements in the theories, and by reflecting on the nature of ideal types. In the last part, I propose a broader interpretation of Buchanan's methodological stance within the academic context of the 1960s. (shrink)